Tesco launches its current account – all you need to know

11 June 2014 By Rob

With minimal fuss, because it wants to launch slowly whilst all its systems and processes are tested out, Tesco Bank launched its current account yesterday.

The stand-out feature is the one that is missing – there is no sign-up bonus. This means that take-up will be modest at best, given that First Direct, Marks & Spencer and others are offering a £100 bonus to switch. This will hopefully change in the future.

You will earn Clubcard points when you use the DEBIT card. The rate is 1 per £4 in Tesco (the same as using the Tesco MasterCard) and 1 per £8 outside Tesco.

The debit card rules come with a catch – financial services transactions do not count for earning points. This means that you cannot make transfers into another bank account using your debit card and earn points for them.

That is a reasonable rule in my view. I don’t like the other rule – that debit card payments are rounded DOWN, per transaction, to the nearest multiple of £8.

In the most extreme case, if you made 100 purchases of £7.99 you would earn ZERO points. There is no point (ahem) to this rule except to artificially restrict the points you earn and make the headline earning rate less generous than it really is.

As with most debit cards, overseas transactions will be hit with a 2.75% fee.

To be honest, I was hoping for something more radical than this. Let’s give it a year and see if they roll out the marketing machine when it has bedded in. More details on their website here.

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